Principles of Macroeconomics Chapter 6

Once every __________, the Census Bureau does a comprehensive survey of housing and residential finance. A. month B. 5 years C. 10 years D. 20 years

10 years

In 1980 Denmark had a GDP of $70 billion (measured in U.S. dollars) and a population of 5.1 million. In 2000, Denmark had a GDP of $160 billion (measured in U.S. dollars) and a population of 5.3 million. By what percentage did Denmark's GDP per capita rise between 1980 and 2000? A. 45.4% B. 219% C. 128% D. 120%

120%

Durable goods and non-durable goods comprise approximately ________ of the supply side of the GDP. A. 1% B. 20% C. 45% D. 80%

45%

In 1990, the GDP of Canada was $680 billion as measured in Canadian dollars, and the exchange rate was that $1 Canadian was worth 85 U.S. cents. In 2000, the GDP of Canada was $1000 billion as measured in Canadian dollars, and the exchange rate was that $1 Canadian was worth 69 U.S. cents. By what percentage did the GDP of Canada increase from 1990 to 2000 in Canadian dollars? A. 19.4% B. 47% C. 68% D. 147%

47%

On the supply side of the GDP, Structures account for around __________ of U.S. GDP. A. 7% B. 17% C. 37% D. 57%

7%

Which of the following is a nonmarket good? A. The corn you grow in your home garden and consume B. The clothes you sew and sell to a neighbor who pays by check C. The self-portrait hanging in your den D. A and C E. A, B, and C

A and C

Which of the following is included in the calculated Gross Domestic Product? A. Farmer Freddie sells his second tractor to his son. B. Suzanne buys a love seat and chair for $85 at the yard sale on the corner. C. A local ice cream store sells $17,000 worth of cones and sundaes on July 1. D. Mr. Farkle buys a used lawn mower from his neighbor, Mr. Sparkle.

A local ice cream store sells $17,000 worth of cones and sundaes on July 1.

Country A has a GDP of $8 billion (measured in U.S. dollars) and a population of 55 million. Country B has a GDP of $9 billion (measured in U.S. dollars) and a population of 4 million. Calculate per capita GDP for each country. A. Country A = $14.50 Country B = $2250.00 B. Country A = $14.50 Country B = $225.00 C. Country A = $145.00 Country B = $2250.00 D. Country A = $1450.00 Country B = $22,500.00

Country A = $145.00 Country B = $2250.00

Gross Domestic Product is computed by using A. Base-year prices. B. Wholesale prices. C. Previous-year prices. D. Current-year prices.

Current-year prices.

In the definition of GDP, the words "total market value" refer to total A. Dollar value at base prices. B. Dollar value at current prices. C. Subjective value. D. Objective value. E. A and D

Dollar value at current prices.

Final goods or services used to compute GDP refer to: A. The sum of all wages paid to laborers. B. The factors of production used to produce output. C. Goods and services purchased by the ultimate users. D. The value of outstanding shares of stock of manufacturing firms.

Goods and services purchased by the ultimate users.

Country A has a higher GDP than country B. What does this mean? A. It means that on a per-capita basis the residents of country A are relatively better off (in terms of the goods and services they have available to them) than the residents of country B. B. It means that on a per-capita basis the residents of country A are richer than the residents of country B. C. It means that more goods and services were produced in country A than country B. D. It means that the total market value of the final goods and services produced in country A is greater than the total market value of the final goods and services produced in country B. E. a and d

It means that the total market value of the final goods and services produced in country A is greater than the total market value of the final goods and services produced in country B.

The value of what businesses provide to other businesses is captured in the final products at the end of the __________ chain. A. Service B. Value C. Production D. Supply

Production

The nominal value of any economic statistic refers to the number that is actually announced at that time, while the ________________ refers to the statistic after it has been adjusted for inflation. A. Empirical value B. Adjusted value C. Real value D. Net value

Real value

A business cycle refers to the A. Continued expansion in Real GDP. B. Recurrent swings (up and down) in Real GDP. C. Continued decline in Real GDP. D. Period when Real GDP grows at unusually high rates. E. None of the above

Recurrent swings (up and down) in Real GDP.

The base year is the year A. In which prices are unstable. B. In which prices are lowest. C. In which prices are highest. D. That serves as a reference point or benchmark. E. In which nominal output is largest.

That serves as a reference point or benchmark.

Which of the following is counted in GDP? A. The purchase of 100 shares of Microsoft stock B. The services of a real estate broker C. Government transfer payments D. The sale of a used car E. None of the above

The services of a real estate broker

The best reason economists take only final goods and services into account when calculating GDP is that A. This is the way things have always been done. B. They want to avoid the problem of final counting. C. They want to avoid the problem of double counting. D. This is the only way things can be done.

They want to avoid the problem of double counting.

The gap between exports and imports in a nation's economy is called the ___________. A. Trade surplus B. Trade balance C. Trade deficit D. Trade inventory

Trade balance

Is it possible for a country with a relatively large GDP to have a relatively small per-capita GDP? A. Yes, since the country with a relatively large GDP could have a relatively large population. B. No, since countries with a relatively large GDP (such as the United States and Japan) also have relatively high per-capita GDP. C. Yes, but only under the condition that the country "produces" relatively more "bads" than other countries. D. Yes, since government transfer payments may be exorbitantly high in the country with the relatively high GDP. E. There is not enough information to answer this question.

Yes, since the country with a relatively large GDP could have a relatively large population.